Building approvals rise in December

Building-approvals-in-December-hit-a-15-month-high-_157_6003145_0_14102274_300With recent news of the Reserve Bank of Australia’s decision to slash the official cash rate likely brightening the mood of property investors across New South Wales, further data from the Australian Bureau of Statistics will improve the outlook even further. Figures show that the number of property approved for construction increased by 1.3 per cent in December 2014, following rises over the previous seven months.

This couldn’t have come at a better time for Sydney homebuyers and investors. Strong approval statistics reflect booming construction and supply, something that will buoy the Sydney housing market over the next year. In New South Wales, residential building approvals climbed 26.9 per cent in the December period, raising the total figure to 5,157.

While not reaching quite the same heights as in November, December 2014 approval data across Australia was still elevated 8.8 per cent above the same period in 2013.

Geordan Murray, HIA economist, said multi unit residents are also driving these strong results. He also pointed out that demand for unit dwellings in New South Wales is going a long was to boosting the country’s overall statistics.

“The sharp spike in multi-unit approvals in Victoria in November was reversed in December (down by 44 per cent). There were some partial offsets with multi-unit approvals growing in New South Wales (up by 52 per cent), Queensland (up by 3.1 per cent) and South Australia (up by 130.6 per cent from a low base),” he said.

ABS data shows the total number of dwelling approvals rose in New South Wales by 3.2 per cent, though Tasmania showed the strongest performance with the approval figures growing 4.8 per cent. Western Australia recorded a 0.9 per cent rise, Queensland (up 0.8 per cent), Victoria (0.6 per cent) and South Australia (0.2 per cent) but numbers dropped in the Australian Capital Territory (down 2.5 per cent) and the Northern Territory (1.9 per cent).

NSW HIA Executive Director, David Bare, said new housing has been particularly important to NSW’s economic recovery and will continue to play that role.

“Signs of further growth in detached house approvals would be welcome in coming months and would signal an even greater economic dividend for the state.”

All signs are pointing to a strong Sydney property investment market, with rising prices and solid supply offering investors a bevy of opportunities.

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